Intrinsic Compounding
Intrinsic Compounding

@soicfinance

4 Tweets 4 reads Jan 07, 2023
Idea of buying a strong business in temporary downturn
Form is temporary and class is permanent as the saying goes. Not all Quarters can be good in the journey of a company. Over a period of time though a complete picture emerges.
Long term performances- 3 years and 5 years depict this.
One of the ideal times is to invest in a good company when it is going through temporary problems. Eg:- One of the agrochemical companies went through a severe downturn in 2016-2018 due to consolidation of end customers.
Another example is of a steel tube company when it reported inventory losses for 2 Quarters in 2019.
If the problem is temporary and your careful analysis brings you to the conclusion that it will go away. That is the time to go and buy and sit on your ass peacefully.
Finally, few such opportunities have again remerged or are emerging after 2-3 years of bull run due to supply chain difficulties or other reasons.
Assess carefully and then strike for the long term..

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